Page:Special 301 Report 2009.pdf/39



Global piracy and counterfeiting continue to thrive due in part to marketplaces that deal in infringing goods. This year's Special 301 Report notes the following markets, including those on the Internet, as examples of marketplaces that have been the subject of enforcement action, or may merit further investigation for possible IPR infringements, or both. The list represents a selective summary of information reviewed during the Special 301 process; it is not a finding of violations of law. The United States encourages the responsible authorities to step up efforts to combat piracy and counterfeiting in these and similar markets.

Markets on the Internet

 Baidu (China). Baidu continues to be identified by industry as the largest China-based MP3 search engine. The U.S. music industry reports that the vast majority (between 50 percent to 75 percent) of all illegal downloads of music in China are associated with this site. Baidu is the target of ongoing infringement actions by both domestic and foreign rightsholders. Baidu executives continue to deny responsibility for content hosted by other websites. Several rightsholders are pursuing legal action in Chinese courts.

Business-to-business (B2B) and business-to-consumer (B2C) websites (China). A large number of these Chinese websites, such as Alibaba and Taobao, have been cited by industry as offering infringing products to consumers and businesses. The Internet traders who use these online markets to offer counterfeit goods are difficult to investigate and contribute to the growth of global counterfeiting.

Allofmp3 clones (Russia). Although allofmp3 (formerly the world's largest server-based pirate music website) was shut down in 2007, a nearly identical site has taken its place and continues to provide for the illegal distribution of copyrighted material. Several other sites provide similar services. In addition, Russia is host to several major BitTorrent indexing sites that are popular channels for illegal peer-to-peer downloading. 

Physical Markets

 Silk Street Market (Beijing, China). Industry has cited Beijing's Silk Street Market as an egregious example of the counterfeiting of consumer and industrial products that is endemic in many retail and wholesale markets throughout China. In 2005, authorities began to pressure the landlords of Silk Street Market and other major retail and wholesale markets in Beijing to improve compliance with IPR laws. The intervening years have brought limited progress. In 2006, rightsholders prevailed in several court actions related to the market and executed a Memorandum of Understanding with the landlords in June 2006. A January 2007 industry survey of the market showed that counterfeiting had worsened. A January 2008 report from industry maintained that the situation remained serious, with a survey of the market revealing piracy levels that increased in most categories from 2007 to 2008. In December 2008, a coalition of brands reached a settlement agreement with the market's management company in which the managers agreed to suspend vendors caught selling infringing goods. In February 2009 some stalls  